EDC announces $750 million in support for oil and gas companies

Despite a Liberal platform a commitment to phase out oil and gas subsidies in the medium term, on Thursday Export Development Canada announced it was making up to $750 million available to small and medium-sized Canadian oil and gas companies “during a challenging time.”

“The prolonged downturn in the price of oil has had a profound impact on Canada’s smaller supply and service companies,” Mairead Lavery, senior Vice-President, Business Development, was quoted in a press release.

“Our goal is to make sure that well run companies have the financial tools they need to get through this downturn. We want them to be ready to take advantage of the turnaround when it happens.”

The $750 million will be focused on helping companies make investments in four key areas, the release explains: increasing a company’s productivity, infrastructure that will increase market access for resources, investing in new technology that can help diversify their products to different industries, and building the sector’s environmental sustainability.

“We know there are many smaller companies across Canada with solid fundamentals that are financially stressed, and those are the companies that we can really help to make it through this period of lower oil prices,” added Mark Senn, the regional vice-president for Western Canada who’s overseeing the $750 million in support.

“EDC is open for business in Canada’s O&G sector, and we want to help as many export-minded companies as we can.”

Though some of the money will be used for environmental sustainability, the new support for the industry will likely raise questions about the Liberals’ campaign commitment to phase out subsidies for the sector.

“We will fulfill Canada’s G20 commitment to phase out subsidies for the fossil fuel industry. In 2014, the Pembina Institute estimated that more than $1 billion in fossil fuel subsidies still existed in our current tax framework. We will direct the Department of Finance to conduct a detailed analysis of fossil fuel subsidies,” the Liberal platform says.